Correlation Between Invesco KBW and Global X
Can any of the company-specific risk be diversified away by investing in both Invesco KBW and Global X at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Invesco KBW and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco KBW High and Global X SuperDividend, you can compare the effects of market volatilities on Invesco KBW and Global X and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Invesco KBW with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco KBW and Global X.
Diversification Opportunities for Invesco KBW and Global X
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Global is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Invesco KBW High and Global X SuperDividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SuperDividend and Invesco KBW is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Invesco KBW High are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SuperDividend has no effect on the direction of Invesco KBW i.e., Invesco KBW and Global X go up and down completely randomly.
Pair Corralation between Invesco KBW and Global X
Given the investment horizon of 90 days Invesco KBW High is expected to generate 1.5 times more return on investment than Global X. However, Invesco KBW is 1.5 times more volatile than Global X SuperDividend. It trades about 0.2 of its potential returns per unit of risk. Global X SuperDividend is currently generating about 0.3 per unit of risk. If you would invest 1,483 in Invesco KBW High on August 27, 2024 and sell it today you would earn a total of 64.00 from holding Invesco KBW High or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco KBW High vs. Global X SuperDividend
Performance |
| Timeline |
| Invesco KBW High |
| Global X SuperDividend |
Invesco KBW and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco KBW and Global X
The main advantage of trading using opposite Invesco KBW and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco KBW position performs unexpectedly, Global X can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Global X will offset losses from the drop in Global X's long position.| Invesco KBW vs. UBS AG London | Invesco KBW vs. UBS AG London | Invesco KBW vs. ETRACS Quarterly Pay | Invesco KBW vs. ETRACS 2xMonthly Pay |
| Global X vs. Global X SuperDividend | Global X vs. Invesco KBW High | Global X vs. Global X SuperDividend | Global X vs. WisdomTree High Dividend |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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